This will also dramatically affect the price of meat, as a significant proportion of livestock in this country is corn-fed.
KevinStud, good answer. I agree wholeheartedly that we need to look to the free market for the answer to this one. But we don’t have to rely on the "experts" to forecast the price of corn. It’s skyrocketing already.

Trolling, I would agree with that analysis if using ethanol did, in fact, allow us to ignore the middle east. But those dictators will still control a valuable commodity and wield the power to purchase more and more powerful weapons with their wealth. Can’t ignore them with or without ethanol.

Newbie, good question. But what if farmers increase production to meet the demand and then the subsidies are deemed ineffective and discontinued? Or (perhaps worse), what if they are deemed ineffective and the government continues to subsidize the corn production anyway to avoid alienating the agri-business lobby?

 

  • Doctor J 1:01 am on March 11, 2010

    The price of tortillas in Mexico (where many people are very, very poor) has already increased 4 fold! Ethanol from corn is an economic joke. Some researchers have concluded that it takes more energy to produce ethanol than the energy yielded from ethanol. If it was truly viable, government would not need to stick its nose (subsidies) in the business.

  • Caveman 1:01 am on March 11, 2010

    Remember not that long ago when a really dry season wrecked the corn harvest?

    We need something reliable.

  • intel_knight 1:01 am on March 11, 2010

    not worth it now.

    Will become a very good idea if Iran nukes couple of oil terminals in the gulf.

  • KevinStud99 1:01 am on March 11, 2010

    That’s a complex issue, more so than people understand. It is certainly too complex for "commodities experts" to solve — even in the VERY unlikely event they correctly forecast corn prices, they are not factoring in any opportunity costs to using or not using ethanol at all.

    The best way to arrive at an efficient answer is to remove government subsidies for farming and ethanol and let the free market react — the free market is much like a computer program solving an optimization problem.

    Do that and see what solution the free market arrives at. Maybe corn is not economical and ethanol fails. Maybe innovations or other factors will make it work out. Who knows.

  • trolling_for_fundies 1:01 am on March 11, 2010

    Farmers can feed their livestock something other than corn mixed with ground cow-brains. If a more expensive steak is the price we pay for ignoring nutshit Mideastern dictators………….then so be it.

  • newbie 1:01 am on March 11, 2010

    If price of corn doubles, won’t supply response?